3 Things – Berkshire / Alleghany, Buckle Capitalizes & A Cyber Judgement – 03/25/2022

Hello!  It has been a rather quiet week with many appearing to enjoy some spring breaks across the US.  This week had interesting activities including the Berkshire Hathaway acquisition, Buckle strengthening their capital position and a reverse judgement worth nothing for the cyber risk space.  Here are the three things we learned:


Berkshire Buys Alleghany

The week started off with a big M&A announcement, Berkshire Hathaway will acquire Alleghany for $11.6B.  Alleghany is a sound fundamental company with a long history and holdings that include reinsurance and speciality insurance, this will be a perfect match to BH’s existing insurance holdings allowing them to expand.  Mr. Buffet had previously bemoaned the high prices of assets in this frothy market but saw value in this deal.  Meanwhile Alleghany’s owners have about the best exit you could have in the insurance industry, not only monetarily speaking but who wouldn’t want to hand the reigns of what you built to another stable and fundamental entity that will ensure to carry on your traditions.


Buckle Further Capitalizes

Buckle, a fintech provider for gig workers, closed a $15M increase in their loan capacity and successfully renewed their reinsurance contracts.  This will capitalize them for growth in a market that continues to grow and have risk gaps for insurance to cover.  Along with this news there were several articles all over this week about the Great Resignation continuing and individuals finding their ideal careers as freelancers and contractors as opposed to the ‘stable’ employment of a company.


Cyber Judgement Reversed

With Cyber being a growing place for innovation (see previous posts) most of the news of late has been about the opportunity for cyber cover innovation and also the threats that continue to grow creating unprecedented risk.  So this week, with the news of a court ruling being reversed related to the Target data breach regarding payment cards was interesting because Chubb (ACE) was found to have to provide coverage for Target’s loss.  The amount has not been determined and Chubb certainly has capital to absorb the loss but the precedent set will be worth watching for others who provide this cover.

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